"So there you have it, Sir Martin's fervent wish that the world returns to a walled garden of proprietary content, a well manicured lawn and beautifully tended flowers where marketers reach consumers through saturation advertising or direct mail or other one way push tactics versus the Saffo/Jarvis/Gillmor view of a chaotic world of continuous discussion, learning from the crowd and remixed media where companies must cede control to gain credibility. To me the choice is as clear as Berlin before the fall of the wall and the Berlin of today." -- Richard Edelman

There you have it, indeed. The above quote is an excerpt from Richard Edelman's response to an article in the Financial Times last week, "Sorrell warns of e-communities threat." Like a drunken gambler's tell, in one simple gesture, Edelman, the CEO of one of the World's largest PR firms, reveals his hand, as well as his intensions. He's all in and then some. He's also betting the future of PR. Bottom line: He's got your future on the line, too.

Here's a brief examination of Edelman's big gamble. Here we also address the essential question "What if he's wrong?"

THE TELL

First, what's a "tell"?

These are typically non-verbal communications cues. An opponent's eyes might blink differently when one is bluffing. Another may exhibit a nervous cough, twitch or itch. Granted it's subtle but this is the essence of the game to the professional gambler. These tells have his/her attention as much or more than the cards themselves.

And then there's the less than subtle TELL! Excuse me but when your gambling "buddy" is buying you another drink... it's not because he likes you. He's dismantling your natural censoring skills so as to get a better read. Same goes for a first date.

That said, Richard seems almost intoxicated with a false sense of confidence. Saffo/Jarvis/Gillmor?! Excuse me he's quoting a soothsayer, a TV critic and a former business reporter. Richard apparently is impaired to say the least. He punctuates his overture with the near non-sequitur slur "tear down that wall," followed almost humorously with "let freedom reign." Ronald Reagan and Martin Luther King, Jr. as icons for the Me2Revolution... surely Richard is drunk.

So what the hell's he thinking? Well, for one, he can just taste a windfall, a HUGE WINDFALL. Where no one has yet to figure out how to make real money on the web (see NYT, "Waiting for the Dough on the Web," 6/25/06) Edleman, to his credit, has. It's not about a final solution, per se. It's about cashing in on the transition.

Richard learned this lesson recently with the absolute boon PR has experienced as drug companies have had to reallocate their marketing spend. As more public scrutiny and regulation has frustrated drug companies use of advertising to influence consumers directly, they've turned to various other options. Richard Lloyd, director general of the lobbying group Consumer International, said in a recently released report, "There are other methods drug companies are using to influence opinion. These include the sponsoring of patient lobby groups, funding disease awareness campaigns and use of hospitality packages for medical experts." THAT'S PR!

Here, let's look at the numbers. Edelman's annual fees are approximately $260 million; while WPP's revenues top $9 billion. If Richard can shake just 3 percent out of Sorrell's hand, he will have in effect more than doubled his business. So wonder he's excited!! With the wind of all the hype of blogging at his back... he could actually pull it off. "Fervent wish," I think it's apparent who has the fervent wish. Richard underscores that quoting Dan Gillmor: "PR is the new advertising and conversation is the new PR." He's counting the money and wistfully daydreaming as we speak.

THE BET

Richard is betting that the future is "a chaotic world of continuous discussion, learning from the crowd and remixed media where companies cede control to gain credibility." By contrast, it's NOT the "walled garden of proprietary content." Whether he knows it or not, the land of "no property" he advocates is by definition called "anarchy." Frankly, from a capitalist's perspective, this is tantamount to various religious groups presently preparing for the Messiah (see LA Times, "End Times Religious Groups Want Apocalypse Soon," 6/22/06).

To quote an Edelman advisor, Buzzmachine's Jeff Jarvis, "It seems that Sorrell is defining capitalism as buying up ever more companies, since that's what he does. But that, I say, is not the essence of the free economy. The individualistic anarchy -- the free marketplace -- of the internet is much purer."

By definition (see Wikipedia): "Anarchism is the name for both a political philosophy and manner of organizing society, derived from the Greek "without archons" or "without rulers". Thus "anarchism," in its most general meaning, is the belief that all forms of rule (boundaries) are undesirable and should be abolished. For many anarchists, this includes not only the state but also the institution of capitalism. The word "anarchy", as most anarchists use it, implies a harmonious anti-authoritarian society that is based on voluntary association of free individuals in autonomous communities, mutual aid, and self-governance.

Pierre-Joseph Proudhon is commonly regarded as the first anarchist, a label he adopted in his groundbreaking work 'What is Property?,' published in 1840. It is for this reason that some claim Proudhon as the founder of modern anarchist theory."

TERRIBLE ODDS

I don't gamble. But if I did, I'd take that bet! Here's 4 reasons why:

1. However anti intuitive, the deluge of info the modern age has wrought ironically has had an anti-communication effect. What the flat-world fanatics fail to realize is that flat has no human depth. According to futurists and scholars like Francis Fukuyama, the key to the creation of prosperity is the cultural proclivity for free association (see Trust). Regrettably, the proliferation of the information economy and Web 2.0 has led to superficial hyper-association. According to a recent study conducted by Duke University, social isolation is way up. "The comprehensive new study paints a sobering picture of an increasingly fragmented America, where intimate social ties -- once seen as an integral part of daily life and associated with a host of psychological and civic benefits -- are shrinking or nonexistent. Far more people appear to suffer alone" (see Washington Post, "Social Isolation Growing in U.S., Study Says," 6/23/06).

2. With regard to a world "where companies cede control to gain credibility"... and surely monkeys will fly out Richard's butt. Excuse me but property owners own the banks, make the laws and can afford attorneys. If anything, Congress is moving to strengthen copyright and patent laws. Just last Friday, the White House released a Presidential Order, "Protecting the Property Rights of the American People."

3. The anti-proprietary-content socialists are dead wrong. Creativity is a cycle. When I make something, I, as a human, need to be recognized (or paid). The net-socialists derail that. Why is there such a short lifespan for more that 95 percent of blogs launched? Because no one is reading them, i.e. no one is paying attention. At the risk of oversimplifying, Open Source as an economic system is poor. Brief celebrity in a flat world is no substitute for food, shelter and long-term financial security.

4. Broad acceptance of corporate blogging is a myth. Less that 6 percent of the Fortune 1,000 currently have blogs... and for good reason. It is antithetical to what a corporation is. "Ceding control" fundamentally runs counter to shareholder value and management's fiduciary responsibility. On the net, public stoning is sport. The risks far outweigh the benefits to rationalize that kind of exposure.

AND WHAT IF RICHARD IS WRONG?

Now for the record, "creative turbulence" is my middle name. A good catalyst that stirs the pot is a blessing in my book. It is also an essential for growth.

On the other hand, as we pointed out earlier, Richard isn't stirring the pot, per se; he's making a business bet. And as they say, a gambler or drunk will take down 20 good people with him. So what if he's wrong?

1. The gambit Richard plays is on the backs of the little guys, not Sir Martin. If he is able to displace 3 percent of WPP's business, Sorrell may have to sell one of his chalets. Well, probably not.

But keep in mind the web is a disruptive technology. It is an intermediary killer. The model that Richard is suggesting is a panacea, doesn't just disrupt advertising; in the end, it disrupts PR, as well. The price for that will be then systematically marginalized. As such there will be a much greater burden on the backs of the little guys.

2. The huge hype around Web 2.0 greatly exacerbates info pollution. As major media erodes, we are losing "authentic" points of reference. The unhappy and enraged crowd will readily defer to... a hungry and blood-thirsty mob. The world where we trust our kind exclusively and not "authority" (see "Trust Shifting From Traditional Authorities to Peers, Edelman Trust Barometer Finds" 1/24/05), also happens to be a far more violent world.

3. Lastly, there is a truly ugly side to anarchy. A colleague of mine once said, "Give everyone spray-paint can and ask them to express themselves variously; That's blogging." I have a different spin on that: Increase social isolation. Make the rules of property amorphous and subsequently make it more difficult for the citizen to participate in wealth. And then... instead of spray paint... give everyone access to an Uzi and/or an IED (Improvised Explosive Devices).

CONCLUSION

Bottom line: no one has ever made a dime betting on anarchy. One can only conclude that Richard is bluffing and has a "Plan B" if this all gets too hot. I hope. But in the meantime, as he's stoking a fire to smoke out his competitor, it sure looks like he could very well burn his own house down... unfortunately with all of us in PR in it.

Corporate Blogging, Time of Death 7.17.06
PR BUBBLE BURSTS
So... did you hear it? It happened about a week ago. A business bubble burst. As it was in PR, I would think you at least heard the subsequent rush of hot air. Here we look at what it all means, what were the telltale signs, w

How can you say no one has figured out how to make money on the Web? HP generates $60 million in revenues per month from its free e-zines. Ny client Agora Publishing has online sales of its paid subscription newsletters of more than $100 million a year. The models for making money online are both established and well known; check out The Mequoda Library online for starteres.

In the real world of business, $100 million is nothing? That's an absurd statement. Are you saying HP's $720 million a year in online sales isn't real, and that they should stop wasting time with Internet marketing? Bill Bonner, who owns the $100 million a year online publisher I referenced, lives in splendor in a restored chateau in the south of France on 300 acres, owns historic mansions throughout Baltimore, and could buy and sell 99.9% of Americans a thousand times over. Are you saying Google and eBay aren't making real money?

Again, I think your are missing the point and actually confusing it with another.

With regards to revenues, remember, a small company is defined as one with revenues that exceed $150 million per year. $100 million is not a lot of money.

Now as to the reference, again it is about media companies. Sorry if I did not make that clear. For the NYT article, "NOW and then, an executive whose brain I'm siphoning will turn the tables and pose a question. And lately, I've been getting a few versions of this: "You talk to a lot of the traditional media companies. Who do you think has got this Internet thing figured out?"

Google definitely makes real money. $7.1 BILLION (gross revenue) in the last 12 months. Of course Microsoft made $33.5 billion in the same period, the vast majority of which was offline. And lets look at Ebay: revenue of $4.9 billion. Again, not bad but not much to compare against Walmart at $321.1 billion. And these are the giants of the internet. Frankly, most companies with online divisions don't even bother to break out internet income because it's simply not a significant part of earnings. Of course, individual companies and people do quite well but in the macro picture online commerce isn't all that striking.

Nah - you're off base with this one Amanda - there's an assumption on your part that anarchy is the result of what Edelman and others are saying. I don't see that. Sure the snarks (like your good self) are out there doing their thing but is that anarchy or informed comment that ain't pretty? BTW - I still believe Edelman remains in command and control mode. It's just the constituency has changed.

To the point about blogs failing. It ain't cos no-one's reading 95% - and who cares anyway - it's because regular blogging is work. Generally unpaid - or at least that's the way it is for many out there. At the moment.

No. I am NOT saying that anarchy is the result of what Edelman and others are saying. I am saying that by definition, anarchy is the world they envision and that's what they are betting on. It just so happens that they are PRing that vision.

Amanda,
I agree with a lot of your points and think your skepticism is healthy, but if you think Richard Edelman is betting the bank on Web 2.0, then you too have been victim of the Kool-Aid. Richard Edelman is doing a lot of positioning around Web 2.0 and doing a good job articulating a future vision -- which may play out, though probably not precisely. What matters is that he's taking a point of view, which is a lot more than most do. If his thought leadership of the future is correct, then he will have done a damn good job creating an infrastructure to ride the wave and leverage the disruption. At a minimum, he's investing in a mindset that accepts change and disruption, which I think is a healthy thing for a large bureacracy that wants to grow beyond traditional PR. If he's incorrect, he's still got his nuts-and-bolts public relations business, and as you correctly point out, that's where the money is...still.

Richard Edelman is not purveying anarchy. He's merely articulating the fact that what we have here is the dying gasp of a business model in journalism that was based on advertising subsidies, not content purchases.

The content has never been anyone's property. Few have ever paid for it. Just ask a librarian or a professorial course syllabus with excerpts from people's deathless prose.

Content has, and always will, belong to its consumers the minute it's out of the mouth, word processor or violin. Copyright protection is only there to attack those who recycle content for their own profits and have deep pockets.

As a journalist, author, it's been obvious to me from the get-go that the photocopier, scrapbook, library and now blogs are my friends, not foes. They amplify my stuff. They market me.

Richard Edelman is not creating anarchy where there wasn't any. It was always there.

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